BERNSTEIN-Circle首次覆盖，目标价230

Mahika Sapra+91 226 842 1408mahika.sapra@bernsteinsg.com Sanskar Chindalia+91 226 842 1445sanskar.chindalia@bernsteinsg.com Price Target CIRCLE: Initiating coverage - The Internet Dollar network for thenext decade We initiate on Circle (CRCL) with anOutperform rating (PT $230). CRCL is building amarket-leading digital dollar stablecoin network, with a strong regulatory edge, liquidityheadstart and marquee distribution partnerships. This is hard to replicate, in our view.We view CRCL as an investor must-hold, to participate in the new internet-scale financialsystem built for the next decade. Over the long term, we expect stablecoins to evolvefrom money-rail of crypto markets to money-rail of the internet. We believe, total industrystablecoin supply will reach ~$4Tn over the next decade vs. ~$225Bn today. This would beled by transformative growth driven by crypto & tokenized capital markets, payments andstablecoin-native financial services. CRCL’s USDC stablecoin would be the largest regulated stablecoin under the GENIUS Act(recently passed by the U.S. Senate) leading to a regulatory headstart for CRCL and USDCbecoming the preferred partner for internet platforms beyond crypto exchanges. We believe,USDC’s $61Bn liquidity is hard to build without the crypto distribution flywheel and severalnew competitors have faced a cold-start problem. CRCL stock is ~5.8x since listing, trading at 56x’26 Adj. EBITDA and ~28x’27 Adj. EBITDA.In our view, CRCL’s heady valuation is a reflection of high investor appetite for a pure-playstablecoin exposure. Our Outperform rating for CRCL reflects our long term conviction thatdigital dollars would form the money-rail of the internet and USDC is best positioned givenits headstart. We see USDC capturing a significant part (30% share) of this $4Tn market in adecade. We value CRCL using a10-year DCF, reflecting this long-term TAM expansion. Our targetvaluation implies a ~35x’27Adj. EBITDA (PT $230). We estimate, CRCL will enjoy break-outrevenue growth (~47% CAGR ‘24-’27E) and Adj. EBITDA growth (~71% CAGR ‘24-’27E)higher than its comps in the payments, fintech & crypto space. We believe, the float incomedriven revenue model creates revenue pressure driven by rate cuts, however, we expectstrong adoption led USDC growth to offset such pressures. Investors will find attractive entrypoints during drawdown phases driven by step decline in rates. Investment Implications VALUATION COMPS TABLE DETAILS EXHIBIT 2:CRCL Overview Company Description Circle Internet Group is leading USD backed stablecoin issuer, with ~$61Bn USDC currently in circulation. Started in 2013, Circle alsofacilitates blockchain based payments and peer to peer transfers. PORTFOLIO MANAGER’S SUMMARY We expect stablecoins to evolve from a largely crypto money-rail today to an internet-scale digital money network, poweredby the blockchain (Exhibit 4). We expect stablecoins to grow from ~$225Bn today to over ~$4Tn in 2035E implying ~2% ofglobal M2 supply vs.~0.2% today (Exhibit 3). Circle Internet (CRCL), the issuer of USD Coin (USDC), is poised to dominate thisevolution of money, driven by its regulatory edge, liquidity headstart and strategic partnerships with two of the leading cryptoexchanges - Coinbase (covered by Bernstein) and Binance (private). We expect the GENIUS Act (now passed by the senate)to be the watershed moment for mainstream stablecoin adoption, making CRCL the largest regulated stablecoin under theAct and preferred partner for banks, payments players and new-age stablecoin financial ventures. We initiate on CRCL with anOutperform rating (PT $230).We believe CRCL is a long term must-hold as a stablecoin category leader and for investorswanting to be exposed to Circle’s long-term transformative payments' story. The U.S. Trump administration is poised to enact the GENIUS Act, 2025 (Guiding and Establishing the National Innovation forU.S. Stablecoins Act of 2025) - now passed by the U.S. senate. The GENIUS Act, authorizes banks and federally regulatednon-bank payment stablecoin issuers to issue digital dollar payment stablecoins (Exhibit 5). The anticipated passage of theStablecoin GENIUS Act will establish a robust U.S. regulatory framework, cementing Circle’s compliance-driven leadership.This would position CRCL as the largest regulated stablecoin issuer with $61Bn of USDC supply. CRCL’s largest global rivalwould be classified as a foreign stablecoin issuer, thus giving CRCL a headstart vs. Tether (private), although we expect Tether tolaunch a U.S. product under the GENIUS Act. As the GENIUS Act opens up the floodgates for mainstream stablecoin adoptionby banks, payments players and businesses, we expect CRCL as the market leader to emerge as the preferred partner forstablecoins. The GENIUS Act would also bring in new entrants to stablecoins such as banks with a strong distribution network. However,we believe, bank-issued stablecoins would likely be guard-railed for qualified clients, prevent